https://www.taxtmi.com/caselaws?id=211406 A finance lease is determined by its substance, not its form: where the lessor only finances acquisition, rentals recover the investment with return, the term is non-cancellable, residual value passes at the end, and the lessee bears maintenance, insurance, tax and operating risks, the arrangement is treated as a loan-like transaction rather than an operating lease. On that footing, depreciation under section 32 does not belong to the lessor because the lessee is the real owner for tax purposes, having control and the essential incidents of ownership. Authorities on operating leases and sale-and-lease-back arrangements were distinguished, and the lessor's depreciation claim was rejected. en-us Wed, 14 Mar 2012 00:00:00 +0530 Mon, 18 Aug 2025 11:51:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=211406 A finance lease is determined by its substance, not its form: where the lessor only finances acquisition, rentals recover the investment with return, the term is non-cancellable, residual value passes at the end, and the lessee bears maintenance, insurance, tax and operating risks, the arrangement is treated as a loan-like transaction rather than an operating lease. On that footing, depreciation under section 32 does not belong to the lessor because the lessee is the real owner for tax purposes, having control and the essential incidents of ownership. Authorities on operating leases and sale-and-lease-back arrangements were distinguished, and the lessor's depreciation claim was rejected. Case-Laws Income Tax Wed, 14 Mar 2012 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=211406